Will Frugality Be This Economy's Detriment?

When I got my $600 stimulus payment last year, I'll admit, it went right into my savings account—and stayed put for a few months. But that really wasn't the point of it at all. The point was to spend it, to keep the money market flowing, but it seems like now more than ever, we're all doing just the opposite. According to CNN.com, just one year ago, the ultimate status symbol was the chicest bag or the most luxurious outfit, reports Kit Yarrow, a consumer psychologist and professor at Golden Gate University in San Francisco, California. "Now what's chic is being the most knowledgeable and efficient at saving money." But is this the mentality that may, in the long room, hold the suffering economy hostage? According to MarketWatch's Thomas Kostigan, "Financial strategies are all about defensive plays" and "the personal savings rate has spiked since the economy got into trouble." And though "a good defense is always the best offense" he admits, that doesn't seem to be helping us now. So what/who could help us? It's "the uber-rich" who could stimulate the economy by spending, spending, spending—but it seems they too have adopted the "chic to be cheap" mentality, Kostigan says. Though it's not just the wealthy minority who may be at fault, he adds, and goes on to list all the money, not just rich people's, being held at a standstill—like the $18 billion in Wall Street bonuses that were handed out this year (that went straight into savings), or the bailout money that went to banks. These funds need to be put into action, he says. And that certainly makes me think differently about the way I'll choose to spend my stimulus this year…if there is one (not that $600 is gonna save the world). Now more than ever, though, is it selfish to save?